Hi, my name is Tori Dunlap, and I’m a financial speaker and educator who doesn’t own a single debit card. No, I don’t use cash, either –– instead, I only use credit cards. This news is usually met with gasps from the audience or, at the very least, some very strongly worded emails about the dangers of credit cards.

Don’t get me wrong, debt is not something I preach, and when it comes to credit cards, most people don’t associate them with anything but debt. There are understandable reasons for this –– mainly because most of us aren’t taught how to use credit cards effectively and without going into debt. Rest assured, it can be done –– and with great success and perks.

The good news is that even if you’ve had a negative experience with credit cards or have been too scared to try using one, I’m walking you through how to take advantage of all the benefits without the pitfalls.

Before we begin: Go at your own pace

If you’re a runner, you’ll know the truth of this –– everyone’s pace is different. When it comes to credit cards, many have had negative experiences and feel anxious about the idea of using them again or may have habits of overspending they need to adjust first.

I always preface my credit card advice with this –– if you’re struggling with debt and overspending, a credit card may not be the best thing for you right now. That doesn’t mean that you can’t ever use one! It may be worth it to get your debts paid down and take some time working with a regular debit card and a well-structured budget for a while to help you build new behavior and spending patterns. There is absolutely no shame in that. If you need some additional help with debt, check out my blog on the best and worst advice for paying off debt.

It might be that you aren’t ready to put every expense on a credit card. It’s OK to start slow and small by using Paceline’s new fitness-focused credit card to purchase a tank of gas once a month or groceries to help you build up more rewards! Just like everyone’s pace is their own, your financial journey is, too. 

The perks of credit cards over debit cards

Most people start with a debit card when they’re young and eventually apply for a credit card. Getting a debit card is as simple as opening a checking account. A credit card, on the other hand, takes an application process. So why do I recommend a credit card over a debit card?

First up, credit cards have better security and fraud protection than debit cards. You’re able to dispute charges if your card is lost or stolen without having your accounts frozen, which is a pretty big deal considering so many people live paycheck to paycheck and can’t afford to suddenly lose access to their accounts.

Secondly, credit cards offer perks that debit cards just… don’t. With my favorite cards, I get cash back on purchases, travel points that turn into free flights or hotel stays, and discounts on some of my favorite services like Doordash, Peloton memberships, and more. Paceline’s new credit card rewards you for spending and working out –– double win! Each credit card offer will be a little different, but overall, most cards offer some kind of cash back or reward point system that you can utilize.

Finally, credit cards help you build a healthy credit score –– an absolute necessity in this day and age. Credit cards, when used well, will help you build scores that can help you get better rates on mortgages, car loans and more.

How I avoid overspending

My first rule of spending with a credit card is this: I never pay for anything with a credit card that I could not pay for in cash. I keep an eye on my budget and make sure that I’m not overspending and putting myself in jeopardy of going into debt.

This means that every single month, I pay off the entire balance of my credit card—no minimums, the whole shebang. A perk to this is that I can easily print my statement balance and run a report to see where I may be spending more than I want to in one area. It’s a great way to ensure I stay on budget (and make sure I’m not being double charged or using subscriptions I forgot to cancel).

Before you decide to open a credit card, make sure you have some kind of plan for your budget.

Busting the credit myths

Myth #1: People who use credit cards are using them to pay for things they can’t afford in cash

Of course, this is true for some, but for many, credit cards are strategic. A general rule of thumb is to never use your credit card for more than you could just as easily afford to pay in cash. Using a credit card as a payday loan or a cash advance can be costly. 

Myth #2: You have to keep a balance on your credit card to have a good score

This one is a straight-up myth. You do not need to keep a balance on your card to build your credit score or keep your account open. As long as you’re making regular purchases and paying them off every month, your card should stay open, and your credit utilization will stay low, which is a positive factor in how your score is determined.

Myth #3: Credit cards are good for emergencies

Please, as much as possible, try not to use credit cards for emergencies. Before opening your first account, I’d consider an emergency fund of 3-6 months worth of savings in an HYSA (High Yield Savings Account). This ensures that you won’t be tempted to pull out the plastic when you get a flat tire or your water heater calls it quits. 

Choose cards that align with your values

When you’re looking for a new credit card, it’s important to consider the things you value spending money on. For example, if you hate traveling, a travel credit card may not be the one for you. On the other hand, if you spend a lot of money on food and dining out, a cash back card that gives more for groceries and dining? Right up your alley!

Most card companies offer “new customer” promotions where you’ll receive a bonus for spending a certain amount of money in the first few months. This is where applying for cards strategically can come in handy.

I often recommend applying for a card with bonuses close to big purchases you were already saving for in cash –– aka weddings, vacations, etc. For example, if a card offers a $1,000 bonus when you spend $7,000 in the first three months, it can be hard to do that with your regular purchases. If you’re spending money (that you already have budgeted) on flights, honeymoons, weddings, parties, etc.? You’re going to get to that threshold a lot faster!

So, take stock of what’s coming up in your life and budget and see if a strategically chosen credit card may help you along the way!

Credit cards are a huge part of building a better financial future when used properly. Remember, only you can know what’s best for you and your finances. Find your pace, and you’ll be on your way. And don’t forget to check out Paceline’s newest credit card offering coming soon!